Nest primarily operates in the food & beverage industry that is valued at US$1 trillion in the Asia Pacific region where 1/4 of the consumer spending is spent on eating out and food delivery. The historical CAGR of this industry in this region for the past 10 years until 2016 is at 9.8% p.a. and is projected to be at 7.5% p.a. until 2026, surpassing US$2 trillion market size. We see a strong movement towards food delivery, partly organically and partly due to COVID-19, which means that there will be high demand for delivery first concepts such as virtual kitchens, as seen elsewhere in the world.
With US$3 billion already invested in the region for the past 4 years (2013-2017), co-working is experiencing a high growth phenomenon with 50% CAGR between the same period, even so, the penetration rate of coworking is just 3.4% of traditional office space.
We expect the long-term effects of COVID-19 to further encourage remote working, flexible leases, and distributed teams once the dust has settled. We also expect an uptick in emerging entrepreneurs coming out from this economic downswing that would require co-working space leases.
Overall, Nest is positioned well in the 3 pillars of F&B, coworking, and virtual kitchen.